Personal Finance Tips: How To Raise Your Fico Credit Score

When you are hiding from bad credit collectors, the save your credit hucksters are ready to pick you clean of your last few bucks by promising to sell you miracles that will fix your FICO credit score or wipe out your debts. Read on to find out what you can do for yourself right now to get back on the path to good credit.

The smartest thing you can do when trying to fix your bad credit is to find out what your score is and what it means. This is not hard to figure out on your own. Anyone has the smarts to do this or knows someone in the family who can help.

Now, let me share a little known fact for taking the time to get your credit report. There is legislation called the F.A.C.T. Act that says all Americans get one absolutely free copy of their credit report every year. This report is not totally comprehensive and I'll tell you why in a moment.

Your free report does give the highlights of your credit history including many of your current and past debts, your payment history on those debts, including bankruptcy going back up to 10 years. But, what you may not realize is there are possibly one or more errors that affect your FICO credit rating that do not show on your free report. These are errors that you can find and correct yourself and give your credit rating an upward boost, yes, even up to 100 points if the errors are serious and not your fault.

Your free credit report will tell you to whom you owe money, how much money you owe, and whether you pay on time or pay 30 or more days late and so forth. All your credit history is computer compiled and evaluated to determine your FICO credit rating.

From that computer analysis, a number is assigned to you as to what your credit fitness level is. This number if your FICO credit score. If that number is below 650, for example, you could be in trouble. You need to get your FICO score to 725 or more. We raised ours to over 800, so it is possible to raise your score by 100 points or more with the correct steps. Potential lenders look at your credit history and score to decide if you are a good risk to pay back the amount of money you are requesting to borrow.

Of course, there is more you need to know in determining and fixing your credit score. However, what should be important to you right now is learning how to read your credit report and how to raise your credit score with the right moves.

Remember: A good FICO score will help you buy the things you need and some of the things you want!

So, where do you get your credit report in the first place?

There are three major credit reporting agencies. Only one will provide you with one free credit report each year. The three are Experian, TransUnion, and Equifax. Access to your free report is available online. Just Google "Free Credit Report." Be aware, however, that the free report may not give you your FICO score. It could cost something to get that number but you need to get it regardless.

That being said, you should get more than one credit report each year. If you are really concerned about your FICO credit score, you need to get a report from each of the three major credit reporting agencies. These will give you much more detail and expose errors you might miss with the free version. Each single report will cost you a small fee from from each agency. So, get your freebie to get you started then get the others soon after.

Why should you bother to get all three credit rating reports?

First, because of those errors I mentioned. Secondly, it is because lenders and creditors pick and choose which credit reporting agency they want to use. Some will report to all three agencies but many do not. Because of this you may find that what is included on one report is not shown on another. The reports can have different information because it is a voluntary system. Creditors pay to subscribe to whichever agency they feel is the best for their particular business so errors may be missed and will continue to affect your FICO credit score.